Trend Lines, Part II

By Mark Roberti

Achieving a global standard for RFID will take time, and there will be bumps in the road, but it will happen.


A couple of weeks ago, I wrote a column praising the Auto-ID Center for the work it has done in promoting RFID as a way to track goods in open supply chains, despite its decision not to use standards being developed by the International Organization for Standardization (see The End of the Beginning). I received an e-mail

from a long-time reader who felt I was underestimating the importance of achieving a single, global standard for tracking goods in the supply chain with RFID technology. As I said in last week’s column, I have long believed that a single standard is not only crucial, but inevitable (see Trend Lines, Part 1). Let me explain why.

There have been many cases of two or more different and incompatible technologies being adopted simultaneously. Sometimes one technology vanishes from the market (i.e. Betamax). Sometimes a technology is relegated to a niche (Apple Macintosh), and sometimes technologies flourish in only specific regions of the world (the CDMA cell phone technology used in the United States). There is a lot of concern in the RFID industry that the Auto-ID Center’s decision not to adopt ISO standards could create a cell phone-like split, with U.S. companies using EPC technology and the rest of the world using ISO.

Won’t happen—at least not in the long term.

Technologies only divide along regional lines when they are used regionally. It would be nice if the United States had adopted the GSM cell phone technology used in Europe, but it’s not a big problem for business in either the United States or in Europe that it didn’t. RFID is a different animal. Trade is global. The United States exported $86.2 billion worth of goods in the month of September alone. Of that, $11.8 billion worth of goods went to the European Union, $2.1 billion to China and $4.2 billion to Japan. The cost and administrative burden of putting different types of RFID tags on products going to Europe and Asia would offset many of the benefits of using RFID. The same would be true for Asian and European exporters.

When you look at the companies that backed the Auto-ID Center’s efforts, they are large global companies that want a way to achieve better visibility of goods moving around the world. They want one RFID system, and they are pushing hard for one system—EPC. Some European companies, such as Marks & Spencer and Benetton, are adopting ISO-compliant technology. And some end users, such as the U.S. military, would like to see an amalgam of the two. It’s my belief that a split would be so bad for companies with open supply chains that if a split appeared likely, companies would be very willing to compromise to avoid it.

The other reason it’s hard to see a regional split between ISO and EPC is that RFID will benefit from the 25 years’ experience companies have using bar codes to track goods internationally. The Uniform Code Council and EAN International, the two main bodies responsible for overseeing bar code standards, have a history of working together to develop international standards. And now the two organizations have formed a joint venture, EPCglobal, to commercialize EPC technology.

EPCglobal is doing the right thing in bringing end users and RFID vendors—both those that support EPC and those that have developed ISO-compliant products—together to develop a standard that meets the needs of global companies. In her first interview since being appointed president of EPCglobal, Margaret Fitzgerald told RFID Journal that one of her main goals will be to work toward “open, consensus-based, global standards” (see EPCglobal Chief to Push Standard).

I don’t know what the global standard will look like or the exact path the parties involved will take to create it. But I do know that global manufacturers have billions of reasons to want a single standard, and organizations such as EPCglobal and ISO provide the means to achieve that end. The one countervailing force that could lead to the adoption of two standards is the need for vendors to recoup their investments in either ISO or EPC technology. That’s an important factor in the short term, but in the long term, the market will settle on a single standard. Nothing else makes economic sense.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.

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